Jan 20, 2024 - Economy

How beauty brands’ sustainability translates to the bottom line

Share of beauty spending going toward sustainable products before and after users received personal data insights
Data: Karma Wallet; Chart: Erin Davis/Axios Visuals

Sephora might be the hot tween hangout, but that doesn't mean it isn't also popular with socially conscious adults.

Why it matters: Once those grown-ups get information on which brands are the most sustainable, they change their purchasing habits dramatically.

How it works: Karma Wallet is a company that allows you to link your credit card to its brand database and see how much of your spending takes place at companies that are aligned with the United Nations' Sustainable Development Goals.

By the numbers: Out of 17,749 brands in the database, 3,250, or 18%, have a ranking high enough that they're considered to be sustainable.

  • Three beauty brands in particular boast very high scores — Prose, Beautycounter, and Aveda, which is owned by Estée Lauder but is also a B Corporation, a designation that certifies a company's positive social and environmental impact.
  • When consumers get data on the sustainability of the brands they're spending money on, they tend to massively increase their spending on those three brands.

The bottom line: It's easy for brands to boast about how sustainable they are. But when the data comes from a trusted third party, it can move consumer spending — especially on largely discretionary purchases like beauty — by a surprisingly large amount.

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